Attending Retail Technology Show in London? Join us at booth #6B61 on 24-25 April. Schedule your meeting now!

Attending Retail Technology Show in London? Join us at booth #6B61 on 24-25 April. Schedule your meeting now!
Video

AI-Driven Inventory Optimization with Academy Sports + Outdoors

John Jarrett, VP Merchant Systems Operations, and Kyle Foulkrod, Sr. Director Logistics and Distribution joined Invent Analytics Founder & CEO, Gurhan Kok, and Chief Revenue Officer, Tav Tepfer to share how they transformed their people and processes and achieved unparalleled results in just a few months.

Learn how they reduced lost sales, ensured product availability, and optimized profitability across diverse channels through AI-driven inventory management, intelligent demand forecasting, and precise inventory decision-making.

  • Introduction (Timestamp: 00:12 - 01:50)

    • Introduction of John Jarrett, Vice President of Merchant Systems and Operations at Academy Sports, and his responsibilities.

    • Introduction of Kyle Foulkrod, Senior Director of Supply Chain, focusing on reverse logistics, vendor compliance, and supply chain optimization.

    • Introduction of Gurhan Kok, CEO and Founder of Invent Analytics, former Duke and MIT professor.

  • Who is Academy Sports? (Timestamp: 01:52 - 02:40)

    • Kyle describes Academy Sports as a $6.4 billion retailer based in Texas, specializing in sporting goods and outdoor activities.

    • Discussion of Academy's store count in 18 states, regional footprint, and distribution centers.

  • Academy's Strategy (Timestamp: 02:43 - 03:31)

    • Kyle discusses Academy's growth strategy, focusing on new store openings, omni-channel business, and strengthening the base business.

    • John talks about the importance of merchandise productivity and supply chain initiatives.

  • Managing Inventory Is a Balancing Act (Timestamp: 03:34 - 05:37)

    • Gurhan addresses the issue with traditional KPIs like service levels and weeks of supply, and the difficulty in balancing them.

    • Explanation of financial optimization in inventory management, converting service levels and weeks of supply into financial terms.

    • Gurhan discusses the balance between customer satisfaction through inventory availability and the challenge of excess inventory.

    • Metrics don’t align

    • Inability to quantify the financial impact 

  • The Path Forward (Timestamp: 05:38 - 08:17)

    • John recounts the journey since 2018, emphasizing the need for improved inventory management and the challenges faced with the ERP system.

    • Discussion on the need for smart, flexible solutions and Academy's decision to partner with Invent for their unique approach and technology.

    • John outlines the priorities for the fulfillment optimization project, including immediate financial impact and fast implementation.

    • To meet Academy’s priorities, they had to be open to new ideas and exploring new solutions and partners for effective inventory management.

  • Accurate Demand Forecasting System (Timestamp: 08:18 - 10:17)

    • Explaining the role of AI in optimizing inventory levels across the network.

    • Discussion of how to maximize Gross Margin Return on Investment (GMROI) for each product, location, and day using AI technology.

    • Gurhan explains the importance of accurate demand forecasting as a foundation for inventory optimization.

    • AI for Financial Optimization of Inventory

  • Performance Review (Timestamp: 10:18 - 12:22)

    • Academy's evaluation of five different solution providers, ultimately choosing Invent due to their quick implementation capabilities.

    • John describes the implementation process beginning in June 2018, including historical analysis, simulations, and an AB test with 50 stores using Invent and the rest on the legacy system.

    • By July of the following year, full deployment across all stores and categories for both DC and store replenishment was achieved.

  • Transforming the Team (Timestamp: 12:23 - 13:38)

    • The organization was initially dictated by the applications of the legacy system, leading to a complex process across different teams.

    • Introduction of the 'Hub Team', composed of Invent data scientists and Academy SMEs, focused on strategy and business performance, while Invent automated the tactical execution.

  • Demonstrated Business Impact from Technology - Fast Path to Margin Increase and Proven Revenue (Timestamp: 13:40 - 14:52)

    • Major KPIs tracked: sales, margin, and turnover.

    • Observations of improved in-stock levels, inventory reduction, and reduced clearance percentages.

    • The impact of these changes contributing to Academy's transition from a private to a public company in 2020.

  • A/B Testing (Timestamp: 14:53 - 16:06)

    • Gurhan presents examples from other retailers to demonstrate the impact of their technology.

    • Example of a department store with 2.87% higher sales and a grocery retailer with 11% inventory reduction and 1.7% improvement in availability.

  • Traditional Warehouse Process (Timestamp: 16:07 - 17:23)

    • Kyle describes the traditional warehouse process, emphasizing the time and labor involved in each step, which impacts in-stocks and requires more inventory.

  • Optimized Cross-Dock and Flow-Through Warehouse Process (Timestamp: 17:24 - 18:02)

    • Discussion of more efficient processes like cross-docking and flow-through, reducing lead times, labor, storage needs, and working capital.

  • Solution Architecture (Timestamp: 18:03 - 19:50)

    • Details on the architecture of the solution developed with Invent, focusing on unfulfilled allocation priority lists and profit maximization steps.

  • Project timeline and benefit (Timestamp: 19:51 - 20:33)

    • Timeline from the initial hallway conversation in May 2021 to implementation in October 2021.

    • First-year results show significant efficiency improvements and benefits in the receiving process and at the store level.

  • Audience Question on Forecast Accuracy Measurement (Timestamp: 20:39 - 21:22)

    • An audience member inquired about how Academy Sports measures forecast accuracy and any improvements in this area.

    • John discusses the shift from their traditional forecasting system, which required significant manual input, to the new system.

    • The new system puts less emphasis on traditional forecast accuracy.

    • Academy Sports has moved away from measuring forecast accuracy in the traditional sense. Instead, they focus on direct business outcomes like revenue, in-stock levels, and lost sales.

    • The current focus is on broader KPIs rather than just forecasting accuracy or parameter maintenance.

  • Summary by CRO Tav Tapfer (Timestamp: 21:33 - 21:58)

    • Tav summarizes the focus on achieving better results by emphasizing profitability and financial impact.

    • The importance of achieving faster results through quick implementation with existing systems is highlighted, ensuring that the solutions are integrated into these systems efficiently.

    • The ongoing results are emphasized, particularly the role of the hub team model in extending the platform and technology to continually address problems using the profit optimization platform.